Canada's Cost of Farming Rises

OTTAWA - Jun 1/04 - SNS -- The cost of farming managed a solid 3.2% gain in 2003, with the result the Farm Input Price Index for Canada finished the year at 132.7, according to the latest Statistics Canada estimate.

The jump in the cost of farming put Canada's agriculture industry in a cost price squeeze. This is made clear by the fact the monthly farm product price index averaged 105.95 points in 2002, but only 100.53 points in 2003.

Higher prices for machinery and motor vehicles (+9.4%) and crop production (+14.0%) were mainly responsible for this annual rise. These increases were dampened by the decrease in prices for animal production (-3.4%).

In 2003, farm input prices rose 4.8% in Western Canada while prices in Eastern Canada increased by 2.0%. The stronger growth in the West compared with the East is mainly the result of the difference in price increases for crop production with the West increasing by 18.8% and the East by 6.8%.

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